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Pre-market explained with one word, "Oracle."

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This morning's higher stock futures can be explained with one word and that word would be "Oracle." Yesterday after the close of trading, Oracle (NASDAQ:ORCL) reported earnings of 15 cents a share and beat analysts by a penny. Actually there were several "one word" portions of their conference call that seems to have some market participants breathing a sigh of relief and coming alive with renewed optimism. While Oracle's fourth quarter earnings fell 7.6% from the year-ago period and the company doesn't expect revenues to rise near-term, the company hinted that it does believe the worst is behind it. This morning, shares of ORCL are trading at $16.75 in the pre-market after finishing yesterday's session at $14.84. The technicals look like the stock has room to the $20.50 level where it would then reach a relative high dating back to April 20th and encounter a downward trend.

Stock futures higher

Stock futures are higher this morning with S&P futures showing a gain of 10.5 points, NASDAQ futures are up 45 and Dow futures are higher by 38 points. Fair value for today is $8.96. Computers are set for program buying at $10.66 and set for selling at $7.56.

Bond YIELDS higher

Bond YIELDS are also higher this morning and this tells traders that we will probably see some selling in the treasury market and some of that money should find its way into stocks. The question is always "how long," but I've learned that the longer-term always starts with the short-term. We'd be looking to play this upside today as long as it lasts. Yesterday's weakness in the NASDAQ-100 wasn't enough to deteriorate the NASDAQ-100 bullish percent ($BPNDX) any further and we could see a market environment that rallies over the next couple of sessions. Resistance on the QQQ looks to come into play at the $45-$47 range. Bearish resistance on the point figure chart is at $48 and retracement levels to be watching near-term would be at the $45 level (retracement taken from $52.18 to $33.65 has 61.8% retracement at $45.08).

Jeff Bailey
Senior Market Technician

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